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integrates-rural-india-115092300024_1.html

Around 80 mn rural households are estimated to have no

access to grid power. Off-grid decentralised systems, based
on renewable energy, are lighting up around 1,000 villages
through government funding. In the first of a two-part
series, Business Standard travels to remote villages in
Bihar's Araria district to see how micro-grids are providing a
reliable source of power to small businesses and rural
households

Till a few months ago, two litres of subsidised kerosene a

month was all that was needed to light a bulb and charge a
mobile phone for three hours in the evening. Not that
kerosene was used to generate power; it was a barter of
sorts, with kerosene traded for a few hours of electricity. The
owner of a diesel-powered genset would sell the kerosene in
the open market at higher rates, turning subsidised kerosene
into a booming business in this un-electrified village in Bihar's
Araria district. The barter translated into a payment of roughly
Rs 32 a month.
In January this year, a lot changed. Mahalgaon got a 30-Kw
photovoltaic solar power plant, with 100 panels. A local police
station is one of the customers of Decentralised Energy
Systems India Pvt Ltd (DESI Power), which runs the micro
grid, just across the road. "We give power to 43 commercial
establishments for the whole day and, at night, to 176
households from 6 pm to 10 pm. The police station is one of
our anchor clients," says S N Sharan, managing director,
DESI Power. These are micro grids, used for the
electrification of villages not yet connected to the main
transmission grid. With renewable source of power, these are
considered ideal off-grid solutions in a host villages, including
those in Bihar, Uttar Pradesh and Madhya Pradesh. In
Madhya Pradesh, for instance, 17 villages have micro grids
under a programme funded by the Union government-
controlled Rural Electrification Corporation (REC) and the
state government.
According to an estimate by a senior REC executive, about
1,000 villages have been funded for off-grid renewable
energy-based power systems since 2008. Another 600 are
expected to be added to the list soon. "One of the criteria for
approving the projects is viability. The operator has to
maintain and sustain it for at least five years," says the REC
executive.
Sharan says though DESI Power is yet to completely recover
its costs, it is likely to start making profits in three years. Its
model is designed to cross-subsidise households with
commercial connections; these charge households Rs 2 for
two lights and a mobile charging point every day, which
translates into Rs 60 a month. Commercial establishments
have to pay at least Rs 250 a month for 10 units of power. "It
is difficult to sustain only on domestic connections; so, we are
looking for anchor load from mobile towers, petrol pumps,
ATMs, pump sets and cold storages," Sharan says.
By contrast, in Madhya Pradesh, where the systems are
funded by the government, Rs 15 a month is charged from
households below the poverty line and Rs 60 from those
above it. Commercial establishments and water pump users
have to pay Rs 800-1,500.
Dharam Nath Yadav and Sunil Kumar Yadav are two
commercial customers of DESI Power in Mahalgaon. While
Dharam Nath runs a mobile repair and computer shop, Sunil
is a tailor. Now, they can work for longer hours. Since January
when the micro grid brought them power, they have stopped
using diesel gensets.
"I used to burn at least one to two litres of diesel in the genset
earlier. Now, I hardly use it; I've kept it as a back-up," says
Dharam Nath. DESI Power is a partner of Smart Power India,
an initiative of Rockefeller Foundation, which last year
announced an investment of $75 million in micro grids across
the country. "We have part funded 49 operational micro grids.
We plan to take the number to 1,000 by 2017. We do it both
as an investor and as part of philanthropy. Since there was no
institutional mechanism available for mini grids, we launched
Smart Power Initiative," says Ashvin Dayal, president (Asia),
Rockefeller Foundation.
Jaideep Mukherjee, chief executive of Smart Power India,
says cell towers could be anchor customers to make business
sustainable for micro grids. "We want to create energy supply
companies. The effort is to build and operate these in a way
that these should be making profits; otherwise, a lot of
companies find it difficult to sustain."

The advantage of such solar power micro grids lies in the fact
that these are modular and can be scaled up easily. DESI
Power earns Rs 40,000-42,000 a month from the Mahalgaon
unit. It has 22 such units, some of which work on a hybrid of
biomass and solar. At Bhebhra in Jokihat, DESI Power runs a
biomass plant that feeds the micro industry and supplies
power for evening lighting. Mohammad Qasim, who runs a
small flour mill and masala unit, is a commercial customer. He
doesn't mind paying Rs 16.50 a unit for power, as it is reliable.
He employs six people and says he makes Rs 40,000-50,000
a month during the busy season. With 20-50-Kw capacity,
DESI Power's micro grids run efficiently only within 800
metres. For households outside this area, the company looks
at tiny grid solutions with a capacity of 1.5-3.5 Kw, unlike
rooftop solar, which is usually used in urban areas and has a
capacity of 3.5-10 Kw.
Sharan says their only competitor, whenever it emerges, will
be grid power, for which, rural electrification is more of a loss-
making business. Compared to grid power, such electrification
is more expensive for consumers but even in an electrified
village such as the neighbouring Lokhariya, a micro grid is
perceived as more reliable, especially in the evening, when
grid power is switched off. Besides, as Sharan puts it, the
purpose of running these systems is not only energy solution,
but integration of a village.